Singapore—Crude oil market in Asia was trading higher at the start of the Feb. 8 week, on strong demand from China and expectations of the US announcing a sizeable stimulus package soon.
April ICE Brent crude futures was pegged at $59.81/b at 0230 GMT Feb. 8, up 43 cents/b from the 4.30pm Asian close Feb. 5.MIDDLE EAST CRUDE**Activity in the week of Feb. 8 will commence after ADNOC and other key Middle East producers, namely Iraq's SOMO and Qatar Petroleum announce their official selling prices. Saudi Aramco issued OSPs last week with prices for Asia-bound crude remaining unchanged from the previous month.
**Traders expect other producers to reveal OSPs along similar lines with Aramco in a bid to stir up demand and increase the competitiveness of Middle East crude against arbitrage barrels from the West.
**As most Asian economies deal with COVID-19 outbreaks and refinery maintenance season, eyes are on Chinese buying intent as trade for April-loading cargoes commences. However, with Lunar New Year holidays approaching and restrictions on domestic mobility to control the spread of the virus, buying activity may be sluggish.
**Dubai cash/futures (M1/M3) averaged 66 cents/b in the week ended Feb. 5, against 47 cents/b in the week ended Jan. 29.
**Intermonth spreads widened a tad during morning trade Feb. 8 with April/May pegged at 50 cents/b, up 2 cents/b from the Asia close Feb. 5.
**April Brent/Dubai Exchange of Futures for Swaps was pegged at $1.17/b at the start of Asian trade Feb.8, down 7 cents/b from the Asia close on Feb. 5.
ASIA PACIFIC CRUDE**The Asia Pacific sweet crude market will seek clarity on Pertamina's condensate tender results for March-April and April deliveries. Traders will also keep a lookout for fresh trades as the April loading program for Australia's North West Shelf has been released with Shell, Mitsubishi and Woodside holding one cargo each.
**Market awaits outcome of India's OVL April 10-16 loading tender for Far East Russia's Sokol crude, which closes on Feb. 10, with same day validity. Sokol differentials are expected to remain stable to higher as the tender coincides with the period of recovering Chinese seaborne demand after the Lunar New Year holidays.
**Market eyes fresh tenders for April-loading Vietnamese crude, as regional crude premiums to Platts Dated Brent remained rangebound amid an influx of arbitrage cargoes from the west coupled with lackluster demand from refineries.
**As blending demand from the low sulfur bunker market edges up after fuel oil cracks reached near 11-month highs, traders will keep a lookout for any Nile Blend/Dar Blend trades in the market.
**Traders were also awaiting information on the availability of April-loading Australian Cossack cargoes after shipments were shut in March amid sporadic weather conditions during the cyclone season.
DELIVERED CRUDE**Following Taiwan's CPC Corporation tender award for WTI Midland crude at a premium of around $1.90/b to the Platts Dated Brent crude assessments, CFR Taiwan, traders are keeping an eye for any fresh trades of WTI Midland crude delivered into North Asia.
**May-delivered market for Brazil's Tupi crude is expected to be muted this week as key buyers in China will be away for the Lunar New Year holidays. Second-half April-delivered barrels were last heard traded at ICE Brent plus around $1.80-$2/b, DES Qingdao.
Crude futures**Crude futures will likely continue to be bolstered by improved fundamentals amid a brighter demand outlook as the coronavirus pandemic sees signs of retreating globally, and tighter supply as OPEC+ stressed its commitment to adhering to existing supply curbs on Feb. 3 after the onset of Saudi Arabia's voluntary 1 million b/d production cut from Feb. 1.
**The market will continue to watch out for developments on the US stimulus package, which is currently proposed at $1.9 trillion, as it is expected speed up demand recovery in the US.
**Demand from China is expected to remain strong ahead of the Lunar New Year despite precautionary travel restrictions, as the country aims to replenish their falling stockpiles.
**Crude oil futures strengthened during the week to Feb. 5, as supply tightened in the Middle East and abatement of the coronavirus pandemic supported demand outlook . The April contract for Brent had ended the week 5.31% higher at $59.34/b, whereas the March contract for NYMEX light sweet crude rose 6.16% to $56.85/b.
